We present comprehensive design rules to optimize the process of spectral compression arising from nonlinear pulse propagation in an optical fiber. Extensive numerical simulations are used to predict the performance characteristics of the process as well as to identify the optimal operational conditions within the space of system parameters. It is shown that the group-velocity dispersion of the fiber is not detrimental and, in fact, helps achieve optimum compression. We also demonstrate that near-transform-limited rectangular and parabolic pulses can be generated in the region of optimum compression.